West Coast port living large now, but can it last?

Port of Oakland first to stage its annual update for shippers. Other California ports to follow.

By ·

container volume reached an all-time high in 2018, mirroring similar box throughput numbers scored by ports in Southern California. The news comes on the eve of Oakland’s annual “State of the Port” luncheon, which apprises shippers and other transport stakeholders on the health of the state’s third largest ocean cargo gateway. 

Oakland handled the equivalent of 2.55 million twenty-foot equivalent units (TEUs) last year, which was up 5.2 percent from 2017 volume. Furthermore, it was the second straight year of record volume.

According to port figures, 2018 import cargo volume increased 5 percent while exports declined 3.5 percent. The volume of empty containers returned to origin destinations for future import loads increased 19.7 percent.

Port spokesmen told LM that multiple influences were at work in 2018 shaping cargo flows, including:

  • A China-U.S. trade dispute that prompted shippers to accelerate import orders ahead of anticipated tariffs
  • A strong dollar that made U.S. exports costlier overseas
  • A buildup of empty containers in the U.S. that required repositioning to Asia because of the import surge.

“Last year was the busiest one ever at the port for a variety of reasons,” says Port of Oakland Maritime Director .  “Our objective now is to build on this performance to grow import and export volume.” 

Driscoll is expected to expand upon this observation when he addresses the luncheon event tomorrow, which is co-sponsored by the . 

It should be noted that the PMSA has sounded a note of skepticism on the sustainability of Oakland’s robust box numbers...as it has on the fortunes of the San Pedro Bay ports. 

“California is losing market share to Eastern, Gulf and Canadian ports,” notes PMSA president . 

In a recent blog post shared with LM, he noted that California’s ports have lost 5% of all North American container market share – dropping from 35.5% to 30.2% and current volume numbers are nearly 50% below state projections.

“Those that import cargo through California cite higher costs associated with regulations, and increased uncertainty with regard to constantly changing environmental regulations and associated costs as the motivations for re-routing goods,” says McLaurin.

He adds that the most disconcerting part of this diversionary trend is that once supply chains are re-routed, “they are notoriously hard to reverse.”

Next week Long Beach and Los Angeles will stage similar “state of the port” forums, and shippers will be keen to learn how they will confront these shared challenges. 

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [ protected]

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From the June 2019 Logistics Management Magazine
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